Section 1113(c) Proposal Term Sheet
Exhibit A - Benefits
PROPOSED BY UNITED AIRLINES
ACTIVE EMPLOYEES
A. MEDICAL
Preferred Provider Option (PPO)
In-Network
$250 single/$500 family deductible
80/20 coinsurance
$1,250 single $2,500 family out-of-pocket limit
Inpatient mental health and substance abuse treatment limited to 30 days per calendar year per person, out patient limited to 30 visits per calendar year per person.
Out-Patient physical therapy, speech therapy, chiropractic and similar therapy treatments limited to $2,000 per person per calendar year.
Unlimited lifetime maximum
Out-of-Network (deductibles and out of pocket limits are in addition to the In-Network amounts)
$150 single/$300 family deductible
60/40 coinsurance
$1,000 single $2,000 family out-of-pocket limit
Covered expenses limited by reasonable and customary
Inpatient mental health and substance abuse treatment limited to 15 days per calendar year per person, out patient limited to 15 visits per calendar year per person (not in addition to in-network)
Out-Patient physical therapy, speech therapy, chiropractic and similar therapy treatments limited to $1,000 per person per calendar year (not in addition to in-network benefit)
$500,000 lifetime maximum
Covered expenses would include necessary care and treatment of illness, injury, and pregnancy as well as expenses for certain preventive care, e.g., pap smears, PSA tests and certain routine physicals. The PPO Incentive check, coverage for hearing aids, and coverage for FAA physicals will be discontinued.
Retail and mail order prescription drugs employee co-payment 10% (minimum charge of $5) of cost for generics and 30% (minimum charge of $10) for brand medication. Deductible of $50 per person $100 per family and out-of-pocket limit of $300 per person and $600 per family per calendar year. Mandatory use of mail order program after a prescription has been filled 3 times at retail. Strong management to ensure consistency with medical necessity and generally accepted practice.
Maintenance of Benefits for employees with other group coverage rather than Coordination of Benefits.
Full right of reimbursement
Cover children to age 19 and to age 23 if full-time student.
Employee contribution for full-time employees would equal 20% of the cost of the plan. Employee contributions for part-time employees would equal 20% of the cost of the plan for single coverage and 50% of the cost of the plan for dependents.
Offer HMO options as appropriate. Employee contribution for full-time employees will be 20% of the cost of the HMO option up to the cost of the PPO option plus 100% of the excess, if any. Employee contribution for part-time employees will be 20% of the cost of the HMO option for single coverage and 50% of the cost of the HMO option for dependents up to the cost of the PPO option plus 100% of the excess, if any.
B. DENTAL
Provide current PPO dental plan
Deductible $50 per person $100 per family (doesn’t apply to preventive)
100% Preventive
80% Restorative
50% major and orthodontia
Annual non-orthodontia max - $2,000
Lifetime orthodontia max $2,000
Maintenance of Benefits for employees with other group coverage rather than Coordination of Benefits.
Cover children to age 19 and to age 23 if full-time student.
Employee contribution for full-time employees would equal 20% of the cost of the plan. Employee contributions for part-time employees would equal 20% of the cost of the plan for single coverage and 50% of the cost of the plan for dependents.
Offer Dental Health Maintenance Organization (DHMO) coverage. Employee contribution for full-time employees will be 20% of the cost of the DHMO option up to the cost of the PPO option plus 100% of the excess, if any. Employee contribution for part-time employees will be 20% of the cost of the DHMO option for single coverage and 50% of the cost of the DHMO option for dependents up to the cost of the PPO option plus 100% of the excess, if any.
C. FLEXIBLE SPENDING ACCOUNT
Current program of Health and Dependent Day Care Accounts with maximum annual contributions of $5,000 per account. Forfeitures to be retained by the Company and used to reduce the cost of the administration of the benefit plans.
D. LIFE INSURANCE
Company paid: 1 times base pay with maximum of $200,000.
Contributory: up to 8 times pay through Group Universal Life
E. ACCIDENTAL DEATH AND DISMEMBERMENT
Company paid: None.
Offer contributory coverage on same basis as current plan.
F. SHORT TERM DISABILITY/SICK LEAVE
Retain sick leave accrual concept. After 6 months of service, accrue one day per month of employment to a maximum of 125 workdays (equivalent for flight groups). Bank to be used for both non-occupational and occupational absences. The benefit is 100% of base salary reduced by any state disability benefit or workers’ compensation amounts. If the employee is eligible for but has not claimed state disability benefits, no sick leave is payable. (Loss of time benefit, management supplemental sick leave, and pilot short-term disability benefits are terminated.)
G. LONG TERM DISABILITY
Provide Long Term Disability insurance coverage at 50% of base pay for all employees to a maximum benefit of $7,500 per month. Employees with one year of service will be entitled to enroll in the plan. The plan will require a period of six months of disability before benefits are payable. The definition of disability will be 12 months of being unable to work in the employee’s own occupation, and thereafter any occupation for which the employee is reasonably qualified.
There will be a 24 month mental health and chemical dependency limit and a 24 month soft tissue/chronic fatigue limitation. There is a Family Social Security offset and offset of income from other sources such as Workers' Compensation, sick leave benefits, and other similar sources. The plan also provides for reducing benefit duration and a pre-existing condition limitation. Employees will pay 50% of the cost of the coverage.
H. ILLNESS LEAVE OF ABSENCE
Maximum period of unpaid illness leave of absence 3 years, medical and dental benefits continue while on approved leave.
I. DEFINED BENEFIT PENSION PLAN
1.3% times final average pay (5) times years of participation to a maximum of 30 years. Early retirement reduced 3% per year from age 62 (60 for pilots). Traditional optional forms of payment with no lump sum distributions.
J. DEFINED CONTRIBUTION PENSION
Beginning in 2004 the Company matches 50% of the employee contribution to a maximum employee contribution of 4%.
K. VACATION
Modify the accrual schedule to the following:
| Completed Years of Service | Weeks of Vacation |
|---|---|
| 1 through 4 5 through 9 10 though 19 20 and over |
2 3 4 5 |
RETIRED EMPLOYEES
A. RETIREE MEDICAL
Pre Medicare
Provide the same PPO option as active employees. Employee must be at least age 55 (50 pilots) with at least 10 years of service and retire from active status or illness leave of absence. Employee contribution based on length of service at retirement as follows:
| Years of Service | % of Cost |
|---|---|
| 10 to 20 20 to 25 25 and over |
100% 75% 50% |
Post-Medicare
Employee must be at least age 55 (50 pilots) with at least 10 years of service and retire from active status or illness leave of absence. One or more supplemental plans to Medicare will be offered with the retiree paying the full cost of the coverage
B. RETIREE LIFE
Employees must be at least age 55 (50 pilots) with at least 10 years of service and retire from active status or illness leave of absence. The benefit is $10,000.
